The biggest pain point with this administration’s economic policy isn’t the tarriffs, it’s the uncertainty. The last thing Lowe’s wants to do is agree to buy sinks for a higher price to absorb...
Lowe’s, which declined to comment, last week finally agreed to a 4% to 5% increase on some sinks, but not all, DeVillers said. He hasn’t gone back to ask for more in the wake of the increased tariff, in part because he is not sure that 15% is the final levy. Thompson Traders may “have to eat it,” he said. “I’m not sure.”
The biggest pain point with this administration’s economic policy isn’t the tarriffs, it’s the uncertainty. The last thing Lowe’s wants to do is agree to buy sinks for a higher price to absorb tarriff fees just before the White House announces more delays or reductions next week.
Any competitors which have not signed agreements can now get cheaper sinks and undercut the competition.
The tarriffs won’t hit all at once, but will be reflected in month-over-month price increases that are slightly higher than before. Businesses are playing a game of increasing prices, but not so quickly that it scares their customers away; having shortages, but not so bad that the customers can’t buy anything.
The actual price increases for these products will reflect companies’ internal analysis of the demand, but especially in highly competitive environments like retail, there will also be a period where the consumer-facing companies try their best to keep prices low despite increasing costs. They know their competitors are under pressure too and it’s a great opportunity to get more customers if they can stay affordable.
I imagine suppliers with pre-tariff inventory will have the advantage until they run out. The ones who don't will avoid selling at a loss by not selling some items. When they all run out, Lowes...
I imagine suppliers with pre-tariff inventory will have the advantage until they run out. The ones who don't will avoid selling at a loss by not selling some items. When they all run out, Lowes will have to decide whether to carry that item at a higher price or not at all.
There's a lot of friction between suppliers and buyers because they're resisting pricing in the tariffs in bidding - they don't want to be the first to acknowledge the cost because it would make...
There's a lot of friction between suppliers and buyers because they're resisting pricing in the tariffs in bidding - they don't want to be the first to acknowledge the cost because it would make them uncompetitive if the others in a bid did not do the same. Then they try to sneak language into contracts that allows them to pass on whatever the tariff price is to the buyer, although I've seen companies fudge that. One supplier just started tacking on a rather steep flat fee to every single order, others wait until they actually incur the tariff. The end result is the same, though - a purchase order is issued that does not match the invoiced price. It's a fairly brazen technique but I imagine the sellers are feeling a bit trapped by circumstance.
The impact of tariffs has been a question hanging over the economy. So far, the global trade war hasn’t caused a surge in prices. That is in large part because companies have absorbed price increases, though that might not last. Pretariff inventories are running low, forcing companies to confront difficult pricing decisions they can no longer delay.
…
Repricing, though, isn’t as easy as changing a tag—in part because suppliers and big-box stores are engaged in an epic tussle over who will pay what.
Retailers, including Lowe’s and Home Depot, buy Thompson Traders’ wares and set the retail price themselves. And they have been reluctant to pay Thompson Traders more.
The biggest pain point with this administration’s economic policy isn’t the tarriffs, it’s the uncertainty. The last thing Lowe’s wants to do is agree to buy sinks for a higher price to absorb tarriff fees just before the White House announces more delays or reductions next week.
Any competitors which have not signed agreements can now get cheaper sinks and undercut the competition.
The tarriffs won’t hit all at once, but will be reflected in month-over-month price increases that are slightly higher than before. Businesses are playing a game of increasing prices, but not so quickly that it scares their customers away; having shortages, but not so bad that the customers can’t buy anything.
The actual price increases for these products will reflect companies’ internal analysis of the demand, but especially in highly competitive environments like retail, there will also be a period where the consumer-facing companies try their best to keep prices low despite increasing costs. They know their competitors are under pressure too and it’s a great opportunity to get more customers if they can stay affordable.
I imagine suppliers with pre-tariff inventory will have the advantage until they run out. The ones who don't will avoid selling at a loss by not selling some items. When they all run out, Lowes will have to decide whether to carry that item at a higher price or not at all.
There's a lot of friction between suppliers and buyers because they're resisting pricing in the tariffs in bidding - they don't want to be the first to acknowledge the cost because it would make them uncompetitive if the others in a bid did not do the same. Then they try to sneak language into contracts that allows them to pass on whatever the tariff price is to the buyer, although I've seen companies fudge that. One supplier just started tacking on a rather steep flat fee to every single order, others wait until they actually incur the tariff. The end result is the same, though - a purchase order is issued that does not match the invoiced price. It's a fairly brazen technique but I imagine the sellers are feeling a bit trapped by circumstance.
Archive: https://archive.is/Q2lLE
…